The financial straits of people with the lowest incomes have become even more dire in recent years, according to a report published by the Finnish Institute for Health and Welfare (THL) on Thursday.
Besides social assistance, the disposable income of unemployed households has fallen by approximately 20 percent compared to five years ago.
According to THL, this is due to the social security cuts implemented by the government of PM Petteri Orpo (NCP), which are aimed at reducing state spending and encouraging people into work.
THL examined the impact of the cuts on the disposable income of recipients of basic security, i.e. recipients of minimum unemployment, sickness, family and pension benefits, in 2024-25.
"This paints a clear picture showing that in most people’s living situations, the cuts are quite visible, meaning that their income has declined," said THL research director Jussi Tervola.
Basic security benefits have decreased, especially for unemployed families with children, as a result of which family incomes are increasingly insufficient to cover essential everyday expenses.
The main culprits are cuts in housing allowances and the elimination of child allowances for unemployment benefits as well as index freezes – meaning that benefits do not increase even if prices rise.
The exception is pension recipients, whose income has not changed much.
Social assistance replaces lost income
The overall cuts in social security have made basic social assistance more important than ever. The total income of households relying on basic security benefits depends largely on whether or not they receive social assistance, Finland's social benefit of last resort for those on very low incomes.
"If you don’t receive social assistance for one reason or another, social security cuts will significantly reduce your income. If you receive social assistance, it may even compensate for the losses in full," THL researcher Joonas Ollonqvist explained in a press release.
Social assistance often supplements other benefits. According to Tervola, many people receive three types of benefits: unemployment benefit, housing benefit and social assistance.
Social security cuts have led to some recipients of benefits receiving social assistance to replace lost income.
At the beginning of the year, it was reported that the costs of basic social assistance increased by almost 100 million euros last year. In practice, the number of social assistance recipients did not increase, but the same people receive more support than before.
Although the costs of social assistance increased, according to Tervola, the government's social security cuts have brought net savings to state finances.
According to Statistics Finland, 230,000 people were completely dependent on basic security in 2023.
The THL report examines the development of income in relation to the general price level, average wages and the amount of money considered necessary for participation in society.
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